Britain's royal family is set for a bumper year of income as it embarks on a 10-year renovation of Buckingham Palace, royal officials said Tuesday.

The works on the monarchy's headquarters are expected to start in the coming months with ripping out 60-year-old rubber cabling, deemed the most pressing concern.

The monarchy's expenditure was £56.8 million ($72.2 million, 64.6 million euros) in the financial year 2016-17, annual royal accounts showed.

It received £42.8 million from the central government, called the sovereign grant, and spent the £14.9 million income it generated itself, largely generated by renting out property.

The £900,000 surplus went into a reserve fund held as an insurance against future leaner years.

"In 2016-17 the sovereign grant equated to a cost of 65 pence per person in the United Kingdom -- the price of a first-class stamp," said Alan Reid, who runs the royal household's finances.

"When you consider that against what the queen does and represents for this country, I believe it represents excellent value for money," said Reid, whose title is Keeper of the Privy Purse.

The royal family carried out more than 3,000 official engagements and undertook 65 visits abroad last year.

Queen Elizabeth's husband Prince Philip, 96, is retiring from royal duties this year and younger members of the family, notably Prince William, second in line to the throne, and his wife Kate, are set to step up theirs.

In his last full financial year of official duties before his retirement in the coming months, Prince Philip carried out 196 engagements.

"The activities of the wider royal family are vital in bringing the monarchy into direct and personal contact with all sections of society," said Reid.

"We can expect to see other members of the royal family doing even more to support the queen in the years ahead."

Royals travelling business class
The sovereign grant pays for the monarch's household staff, property maintenance, official travel, housekeeping and hospitality.

It is paid in return for the profits from the Crown Estate -- the monarch's hereditary land and property portfolio -- which are surrendered to the Treasury under a deal dating back to 1760.

The grant amounts to 15 percent of the Crown Estate profits, but is set to go up to 25 percent for 10 years to pay for the refurbishment of Buckingham Palace, so will rise from £42.8 million to £76.1 million next year.

The wing-by-wing palace refit is set to cost £369 million, of which £139 million will be met by greater efficiency and opening the palace to the public for more days per year once the works are completed.

The refurbishment is set to replace electrical wiring, water pipes and boilers in the biggest overhaul since the 1950s.

Meanwhile royal sources revealed that members of the family frequently travel in business class rather than first class, depending on the circumstances, as part of cost-cutting measures.

The monarch has to sign off on all visit plans and some are deemed too expensive.

Royal officials stressed the sovereign grant should not be seen as money going into Queen Elizabeth's pocket.

"This isn't earnings. It's the reimbursement of expenses for doing the job for free," a source told AFP.

"In no way does it relate to pay."

The Crown Estate said Tuesday its annual profits -- all given to the Treasury -- had hit a new high, rising 8.1 percent to £328.8 million for 2016-17 in contrast to the year before.

Prince Charles also released his annual accounts, showing the heir to the throne's income from his hereditary estate the Duchy of Cornwall had increased by 1.2 percent to £20.7 million.